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Apr 03, 2021
Insteel Q2 2021 Earnings Report
Second quarter results were favorably impacted by continued strong demand for its reinforcing products.
Key Takeaways
Insteel Industries reported strong second quarter results with net earnings increasing to $14.9 million, or $0.76 per diluted share. Net sales increased 21.0% to $139.0 million, driven by higher average selling prices and increased shipments. Gross margin also widened due to higher spreads between selling prices and raw material costs.
Net earnings increased to $14.9 million, or $0.76 per diluted share, compared to $4.4 million, or $0.23 per share, in the prior year quarter.
Net sales increased 21.0% to $139.0 million from $114.9 million in the prior year quarter.
Average selling prices increased 15.0% and shipments increased 5.2%.
Gross margin widened 840 basis points to 21.7% from 13.3% in the prior year quarter.
Forward Guidance
The company expects solid performance in the second half of the fiscal year due to favorable trends in non-residential construction markets and the usual seasonal upturn in demand. However, they anticipate tight supply conditions and escalating prices for steel wire rod.
Positive Outlook
- Favorable trends in non-residential construction markets.
- Usual seasonal upturn in demand.
- Recent private non-residential construction leading indicators are signaling a rebound in activity close to pre-pandemic levels.
- Public construction activity has remained resilient.
- Favorable determinations in trade cases against sixteen countries.
Challenges Ahead
- Extremely tight supply conditions in both domestic and international markets for steel wire rod.
- Escalating prices in both domestic and international markets for steel wire rod.
- Delivery performance by suppliers may be unpredictable.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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